A profile of leadership, innovation and disruption in the construction industry: Jussi Aho, CEO of Fira Construction Group
When Jussi Aho took control as CEO of Helsinki-based Fira Construction Group in 2009, he announced an audacious goal: Fira would multiply yearly revenue from €17 million to €100 million by 2016. Some were skeptical. And rightly so. Mr. Aho’s target would indeed be missed.
Turns out, it was far too low.
Fira Project: Helsinki Outlet
Today, Fira’s yearly revenue is around €220 million-and-growing. They are poised to be a key player in the disruption of the construction industry. The grit, innovation, and strategic vision propelling that impressive climb describes a story more typical of tech startups than the historically change-resistant construction industry. That’s not a coincidence.
Mr. Aho recognized early on the tremendous value in approaching construction with a startup mentality. He led Fira’s transition from a traditional expert-driven concrete construction business to a customer-oriented service model. People quickly began turning to Fira for its customer-first attributes. Innovative service add-ons built trust with customers via a transparent process designed to better achieve their goals. Unpleasant surprises, delays, and cost overruns went down. Satisfaction went up.
“Our innovation was we connected our own building information modeling (BIM) to cost estimation and an ecosystem. If the project estimate was too expensive, we could look elsewhere to simulate and iterate services or to remove or streamline elements of the project to fit the customer’s requirements. This co-creation model is important to what Fira stands for and where we are going.”
Ultimately, disruption in the construction industry is about delivering greater value for the customer. This has translated to designing modular innovation and digital tools that eliminate friction within construction projects, which are notoriously laden with inefficient processes and wasteful practices. Moreover, the built environment is still mostly one-size-fits-all; and occupants are demanding greater say over, for instance, their energy consumption.
“Construction has been a fragmented and local business suffering from poor adoption of digitization and technology,” said rural Finland-born Mr. Aho, the son of a police officer. “It’s a hundreds-of-years-old business that’s slow to change, like agriculture. But now, digitalization is entering this area. It means you can build new logic and processes into this business that weren’t previously possible.”
Opportunity space
Improving productivity in construction represents a massive business opportunity. As a 2017 McKinsey report noted, the construction industry’s productivity has negligibly improved since 1945, compared to the up-to 1,500 percent productivity gains in the manufacturing, retail and agriculture industries. Solutions to productivity problems—like fragmentation of tools and services, cultural and communication barriers (multiple languages are often spoken at single construction sites), and lack of digitization–signify an opportunity to boost value in the $10 trillion global construction industry by $1.6 trillion.
Fira has been at the leading edge of productivity-enhancing innovation for the past decade. Looking ahead, Mr. Aho sees a vast opportunity to grow via smart partnerships and a cultural embrace of technology and innovation. They are aggressively pursuing bold long-term strategies to shape the industry’s coming transformation.
“Transforming the way things are done in an industry that has resisted change for centuries isn’t going to be easy,” said Mr. Aho. “I’ve read lots of articles talking about how problems for productivity need to be solved by technology and digitization, but if it were easy it would have already been done. We think that even in the short term we can vastly increase work-site productivity by implementing better service models and innovations.”
Strategic horizons: Production systems and the end-user
Mr. Aho is building a dual-horizon future for Fira and, by extension, for his industry. The first horizon involves production systems: digital tools and building modules. The second horizon involves living systems: energy, smart infrastructure, and financing that enable more choice to the occupant.
The ultimate result will be dynamic built environments that live and breathe, adapting to owner-occupants’ needs—from environmental to financial–as they shift over time across the building’s lifecycle. Each horizon is fundamentally connected to the unifying final vision of disruption in the construction industry, flowing from one to the other.
Horizon 1
Production systems. Fira is developing digital tools to help companies improve construction site productivity. This entails eliminating inefficiencies to lower costs and minimize delays. This horizon includes:
- Digital tools: Scheduling and project management software, along with data collection at sites to see what’s working and what’s not. When a project begins, there is greater assurance that everyone comes to the site on-time and they have everything they need to get their work done.
- Building modules: In the longer-term, solutions for this horizon will be mass-tailored for customers rather than one-size-fits-all. Today, Fira has a proprietary innovation in bathroom modules, the heart of the building including connected HVAC systems. Modularity allows for dramatically faster construction at scale, with greater assurance in consistency and quality, not to forget impressive design elements.
“It’s very simple: when he arrives at the building site, does the worker have all the information and tools to do his work and, if not, what can we do to help him?” says Mr. Aho. “There are so many things that the worker needs, and if something is missing he ends up on a wild goose chase instead of being productive. Usually, 30 to 40 percent of his time is spent adding value and the rest he is seeking things to do.”
Horizon 2
Occupants’ living systems. This comes down to expanding choice on energy and financing.
- Energy: The end-user can select from a mass-customizable built environment that best suits his or her needs. Fira is integrating technology into its building modules to give occupants greater control over their residential habitat, from managing energy consumption to expansive IoT integration. That smart infrastructure makes the living environment more dynamic and adaptable to change.
- Many people rent because they lack the capital to own. But imagine being able to own a share in your apartment: enter the co-op homeowner model. That is the future of home financing Fira is pioneering in Finland, with backing from the local government. This financing model attracts more buyers and also provides a new opportunity for real estate investors.
Innovation ecosystem
No single player will transform the construction industry alone. Buildings are not phones or computers. Mr. Aho is thus building a global innovation ecosystem and investing in the future by engaging with strategic innovation partner, Xinova, whose Map-Design-Build process provides critical insights into the structural forces of change working to disrupt a business or industry.
Once those forces are understood, emerging opportunities can then be identified and targeted with the optimal response. This unique approach to analyzing and mapping industries results in tangible breakthroughs that reveal market inefficiencies and vulnerabilities.
“The most important thing is that we are going to see new types of production systems,” said Mr. Aho. “It’s not going to be one single innovation, so you need to have a solution that is systems-based. You need to be able to multiply these innovations. Everyone wants to do it themselves in construction, but it is going to be an ecosystem that will transform the industry.”
Mr. Aho has long held a global perspective on innovation and business. He graduated with a degree in civil engineering and completed visiting research in Florida on service models. His first career in sales was successful for expanding activity beyond Finland. He then brought his collaborative, service-minded focus to Fira and helped launch their first phase of explosive growth.
“The traditional construction process is broken.”
Every construction job varies from site to site and project to project. A lot can go wrong between permitting and procurement processes, geology studies and architects’ plans. To minimize unnecessary roadblocks, it’s vital that everyone shows up on-site knowing what to do and has the tools to do it. These teams of architects and engineers, contractors and skilled tradesmen—builders, plumbers, tilers, HVAC installation, painters, electricians—must have clear, up-to-date information to go with the necessary equipment at the site to complete their jobs.
“The traditional construction process is broken,” he said. “The customer tells the architect what he wants, and the architect draws it up, and then the construction company is told to enact those plans. There’s so much that can go wrong without involving all the players. We need a solid business model that enables co-creation. Everyone in construction thinks they can do it best in-house. Sure, they may have very clever people and interesting technology in their company, and in their country. But there are always gaps. There are many more clever people and interesting technologies located outside your company, and around the globe.”
In the end, digitization will ensure construction is no longer balkanized. A higher level of consistency and quality will be assured by advances in modularity and the development of service platforms that remove waste, inefficiency and guesswork from a construction site. And a global ecosystem of technology and service providers will ensure the most efficient matching of what’s needed, and when and where it’s needed.
Reputation is gold
At its core, Fira is a people-first business. Mr. Aho’s ambitions for innovation and digital tools emphasize the needs of the people they serve, from the customer to the building’s occupants. Construction projects are complex and, in the absence of digitized processes, keeping promises has been especially crucial to quality and productivity. Cost overruns and delays are common due to the many factors that can derail project, from unexpected environmental challenges to operator errors.
Reputation thus carries especially large value in construction. When someone says they will do something, Mr. Aho expects his collaborator to get it done. His reputation is ultimately at stake. It’s a personal value that he says is vital to success in his industry. But it’s more than that. It’s about integrity. Indeed, Mr. Aho believes having values adds value to a company. Staying true to those values is vital—even when it’s easier to look the other way.
Having values adds value
That commitment to values was put to the test in 2012. Mr. Aho discovered that a member of his company was engaged in a fraud and bribery scheme that reached high up into both the public and private sectors. The construction industry is associated with corrupt practices worldwide, but less often in Finland where corruption is systemically uncommon. Finland annually ranks amongst the 10 least corrupt countries in the world (and five most happy and best-educated).
Fira’s business was going strong. The last thing Mr. Aho needed was to take on a bruising legal and business battle. He could have turned a blind eye rather than incur a black eye. Few would have blamed him. But then he’d be doing something his father and son would not approve of.
Media interest was huge after Mr. Aho informed the authorities about the case. But the experience wound up being an act of creative destruction.
Fira was audited down to its DNA. They came out not just clean, but scintillating. By heading into the storm, Mr. Aho and Fira passed into brighter new horizons. In 2017, Mr. Aho became the first CEO—and one of the only civilians ever—to receive the gold medal of the police for acting against corruption and black market activity. Mr. Aho’s police officer father, a champion K-9 trainer, was incredibly proud. And that same year, Mr. Aho was named civil engineer of the year in Finland.
The anti-corruption experience affirmed to him that he’d done the right thing. It was important for him to believe that the Finnish justice system was there to serve and protect its citizens. He’s seen enough of the world to know that things would have likely gone decidedly worse elsewhere for a small company taking on corruption.
“We want to keep this company clean so that we can be a trusted partner. In the long run, we want to do good for people and for the environment as we develop great solutions and innovations.”
His father instilled values that Mr. Aho says he constantly “wears as his national hockey jersey.” There’s a picture he shows of his father and his son, three generations of Finnish men, in which Mr. Aho explains that as his father passes into the shadow of dementia, he is teaching his own son the same values that took him where he is today. His goal as a businessman is for his son to know him as a father who was always honest in all his dealings.
“It’s very important to understand what our principles are in business,” said Mr. Aho. “Are we just making money, or are we also doing good? These two goals must be tied together. For me, I feel we are also doing good. It’s not only making money—it’s about good business and doing good.”
***
Since becoming CEO of Fira in 2009, Jussi Aho has more than 10X’d yearly revenues while establishing the Finnish construction company as a global leader in innovation and corporate responsibility. In 2017, Mr. Aho became the first CEO—and one of the only civilians in history—to receive the Finnish Police’s Gold Medal for anti- corruption and black market activity. In 2017 he was named civil engineer of the year in Finland.